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The outlook is bleak, and financing needs clear, for small businesses in emerging markets

ImpactAlpha, May 20COVID is crushing small and growing businesses in emerging markets. Four in 10 companies supported by members of the Aspen Network of Development Entrepreneurs members risk failing in the next six months. Half of businesses in a Global Accelerator Learning Initiative survey have lost more than half their revenues.

The impacts are disproportionately hitting women-led companies and businesses in the food services, arts, events, tourism, and recreational and manufacturing sectors.

The bleak data is rounded up by ANDE and Dalberg in “The Small and Growing Business Sector and the COVID-19 Crisis,” previewed earlier this month on ImpactAlpha.

The range of needed responses is becoming clearer as well (see, “Needed: Responsive, aggregated and accessible capital for (once-) growing businesses in emerging markets).

  • Flexible funding. Grants, speed, pricing, grace period or flexible repayments – choose your opportunity. Note: Small and growing businesses would prefer not to take on new debt at all – unless it’s forgivable. Equalife Capital, responsAbility, Vital Capital, Open Road Alliance, and a host of development banks are in the market with relief and recovery vehicles (see, “Your pipeline of impact deals in emerging markets is at risk. Three things you can do about it).
  • Survival bootcamp. Small and growing businesses pivoting and adapting to changing market conditions. The African Management Institute launched the COVID-19 Business Survival Bootcamp to support cash-flow forecasting, crisis leadership and mental well-being. Technoserve’s “Reset, Adapt, Engage” framework is helping businesses navigate the crisis and build digital skills for remote engagement.

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